1: How do we determine whether our employees are properly classified as “exempt”?

A: The determination of whether an employee should be classified as “exempt” from overtime or “non-exempt” can present a challenge to many employers. Notably, whether an employee is paid on a salaried basis, rather than hourly, is not indicative of the employee’s exempt status under the law. To further complicate matters, the tests applied under state and federal law have distinct differences and classify different categories of workers as “exempt.” For example, federal law recognizes an exemption for “highly compensated” employees who earn at least $100,000 per year, but Connecticut does not recognize this category of exemption. It is important for employers to ensure that employees are properly classified, given the recent commitment by State and Federal governments to ramp up the enforcement of these laws and the potentially significant penalties that could be levied in the event of a violation. In October 2010, legislation was enacted in Connecticut increasing the penalty for knowingly misclassifying employees from a one-time fee of $300 per violation to $300 for each day that the violation exists for each misclassified employee. For each misclassified employee, therefore, employers could face penalties totaling more than $100,000 per year.

To determine whether your workforce is properly categorized under state and federal laws regarding exemption in order to avoid any penalties or employee claims for unpaid overtime, you should seek the advice of counsel.

2: Under what circumstances may we contest an employee’s rights to unemployment compensation?

A. In general, it is difficult to challenge a claim for unemployment compensation made by a former employee. Under certain circumstances, however, a challenge will be successful and worth bringing. In Connecticut, an employee is not entitled to receive unemployment compensation if he or she:

(1) left suitable work voluntarily and not for any cause attributable to the employer (e.g., change in pay or hours, workplace hazard) or other legitimate reason such as to care for an immediate family member with an illness or disability;
(2) is physically or mentally unable to work;
(3) has been discharged or suspended for felonious conduct in the course of employment;
(4) has been discharged or suspended for conduct in the course of his employment constituting larceny of property or service, whose value exceeds $25 or larceny of currency, regardless of the value of such currency;
(5) has been discharged or suspended for willful misconduct in the course of employment;
(6) has been discharged or suspended for just cause, in that he or she endangered the life, safety or property of the employer, fellow employees or the general public;
(7) has been discharged or suspended for participation in an illegal strike as determined by state or federal laws or regulations;
(8) was sentenced to a term of imprisonment of 30 days or longer and has been discharged or suspended during such period of imprisonment; or
(9) has been disqualified under state or federal law from performing the work for which he or she was hired as a result of a drug or alcohol testing program mandated by and conducted in accordance with such law.
A determination of whether any of the above situations apply should be made in consultation with an attorney.

3: Are we required to provide an employee with an unpaid leave of absence for health-related reasons?

A. It depends. If your company employs at least 50 employees within a 75-mile radius of the worksite, then you must abide by the Family and Medical Leave Act (“FMLA”). If your company employs at least 75 employees in the State of Connecticut, the CT FMLA applies. Under the Federal FMLA, 12 weeks of unpaid leave may be taken within a 12 month period, provided the employee has worked for the employer for at least 12 months and a minimum of 1,250 hours in the preceding 12 months. Leave is required for a new child and/or a serious health condition of the employee or his or her immediate family. Under the CT FMLA, 16 weeks of unpaid leave may be taken over the course of a 24 month period. The employee must have been employed for the preceding 12 months and worked at least 1,000 hours. Employers should also be mindful of new regulations that have been enacted regarding leave for military family members that should also be considered.

If your company is not bound by the FMLA, you should be sure to evaluate the employee’s leave request pursuant to the Americans with Disabilities Act or its state law equivalent. An employee who does not qualify for FMLA leave may be entitled to a leave of absence as a reasonable accommodation for his or her disability. Accordingly, all requests for leave should be reviewed thoroughly to ensure compliance with state and federal laws.

4: Are we required to give an employee FMLA leave in addition to his or her paid vacation time or sick time, or may we require that the employee’s paid leave run concurrently with the unpaid leave under the FMLA?

A. You may require the employee seeking FMLA leave or other unpaid leave to exhaust his or her paid leave concurrently with the unpaid leave. An employee is not permitted to take unpaid leave and then take additional paid time off without the employer’s consent.

5: Are we required to provide an employee with an offer letter?

A. You are not required to provide an “offer letter” per se, but Connecticut law requires that you provide employees with certain information in writing at the commencement of their employment. Specifically, you need to inform new employees in writing of their rate of remuneration, hours of employment and wage payment schedules. In addition, you must make available to employees, either in writing or through a posted notice maintained in a place accessible to employees, any employment practices and policies or changes with regard to wages, vacation pay, sick leave, health and welfare benefits and comparable matters.

6: My company is headquartered in Connecticut, but has branches in New York and Florida—which state employment laws should the company should follow?

A: All of them. The employees at each location are protected by the laws of the state in which they work. You should also be cognizant of federal employment laws, which may apply to all employees regardless of the state in which they work.

7: My company has 25 employees. One of our employees recently requested an unpaid leave of absence to deal with a chronic medical condition. We don’t have the resources to operate for a lengthy period of time without this employee—do we have to provide the requested leave?

A. The answer to this question requires an analysis of the specific facts surrounding the employee’s medical condition, the length of the absence requested and the actual impact of the absence on the company. Because your company has less than 50 employees, you are not required to provide unpaid leave mandated by the Family & Medical Leave Act (“FMLA”). However, if the employee can establish that he or she is a qualified individual with a disability who is requesting a leave of absence as a reasonable accommodation for that disability, the company has an obligation to try to work with the employee to make such accommodation provided it will not cause an undue hardship to the company. You should consult legal counsel for fact-specific advice applicable to your situation.

8: We have been told that non competition agreements are unenforceable. Is this true?

A: No. In most jurisdictions (California being one exception) non competition agreements are enforceable and may provide the basis for an injunction against a former employee. However, courts scrutinize non competition agreements carefully and will not enforce such provisions if they are unreasonable. In Connecticut, the courts generally evaluate the reasonableness of non competition provisions on the basis of the scope of the work they prohibit, the length of time they are in effect, and their geographic scope.

9: We have decided to require all of our sales personnel to sign non- competition agreements. Are there best practices we should follow concerning their execution?

A. In many jurisdictions, continued employment is not in and of itself sufficient to make a non-competition agreement enforceable. Thus, it is best to give your existing employees additional consideration, such as a bonus or a cash payment, in exchange for signing a non-competition agreement. It is best to give new employees a copy of a non-compete agreement before they begin working and to have it signed on or before they commence work as a condition of employment.

10: We have never required our employees to sign Confidentiality Agreements or any other documents protecting our proprietary business information. An employee who we trained and introduced to our clients quit and stole our entire client list. Do we have any recourse?

A: The Uniform Trade Secrets Act expressly prohibits the theft of trade secrets. This Act has been passed in all jurisdictions except Louisiana.

DISCLAIMER:

THE ABOVE INFORMATION IS FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE LEGAL ADVICE. IF YOU HAVE A POTENTIAL EMPLOYMENT CLAIM YOU SHOULD CONSULT AN ATTORNEY FOR CLARIFICATION ON THE LAW AS IT APPLIES TO YOUR UNIQUE CIRCUMSTANCES. PLEASE BE ADVISED THAT ANSWERS TO THE ABOVE QUESTIONS MAY VARY DEPENDING ON THE LAWS OF THE STATE IN WHICH YOU ARE EMPLOYED OR LIVE AND THAT THE INFORMATION PROVIDED IS INTENDED FOR GENERAL INFORMATION ONLY AND IS NOT STATE SPECIFIC UNLESS STATED OTHERWISE.